By Mark Pender

NEW YORK (MNI) – MNI’s U.S. retail trade index jumped more than
nine points in the July 9 period to 67.8, far above 50 to indicate
robust year-on-year growth in business conditions in a move however that
may not be signaling an upward pivot for retail sales, according to the
results of Market News International’s weekly survey released Monday.

Total sales jumped 1.1 percentage point to a year-on-year +6.3%
with same-store sales up one point to +4.0%. Taken together, these
readings are the best of the recovery.

When adjusted for a June-to-May comparison, the data point to a
0.1% gain for the government’s ex-auto ex-gas category in what would
extend a sizable streak to 11 straight gains.

But including gas, where lower prices look to depress sales, MNI’s
data point to a 0.2% decline for the ex-auto category. Including autos,
where unit sales are weak, the data point to a 0.3 percent headline
decline for total sales.

Most chain stores that use the retail fiscal calendar reported
unquestionably strong results for the five-week period, yet we’ll have
to wait for Thursday’ retail sales report to see how much of this
translates to strength for the government’s calendar month of June.

Fiscal June includes two of the three days of the Memorial weekend
in May and also includes two days leading up to the Fourth of July.
Comments on both of these periods are strong and contrast with
descriptions of softer activity during mid-month June.

Strong months can often trigger a wave of upward guidance, but not
in June when some chains in fact cut guidance following their results.

And commentary on the month isn’t pointing to a new consumer but
largely to a release of pent-up seasonal demand tied to warm weather, a
sudden surge that may be pulling summer sales out of July.

Yet income is clearly a positive, bouncing back five percentage
points to +10% which is at the top of trend. Sample size in the period
is 118 chains making up 100,000 separate retail locations.

Editor’s Note: MNI compiles its retail trade index based on a
weekly sample of company news and data.

** Market News International New York Newsroom: 212-669-6430 **

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